The FT kick off the week reporting something that you’ve been reading on this blog and in the pension trade press, the flow of pensions to insurance annuities is slowing as the size of buy-ins and buy-outs slows. Thanks Mary McDougall and Lee Harris for this; (free link for early birds).

The FT make the slowdown political and indeed a section of the Pension Schemes Bill (debated last week in the House of Lords) will make it easier for sponsors of DB schemes for pensioners in the private sector to get at surpluses.

Insurers bought up about £40bn of assets through pension “buyout” deals completed last year, according to preliminary estimates from consultancies LCP and Mercer, down from £48bn in 2024 and £49bn in 2023.

The FT report results from Just and Aviva. both of whom are below expectations. Big deals such as Ford’s £4.6bn buy-in with L&G are few and far between.

FT reports the increasing ownership of American private equity houses in what were UK insurers. These include PIC, Just and Utmost, all of which have found the capital needed to do the trades abroad, often reverting to funded reinsurance in Bermuda.

While the insurers say guns are lined up for a demolition of investment in DB schemes in 2026, we heard them say much the same in previous years and despite DB schemes being in a financial position to sell up, the FT report a different mood

But some trustees are now rethinking whether to sell their defined-benefit schemes, considering whether they can instead retain them and share more surplus assets with members and their employers.

What has not happened as we might have expected back in 2018 when a Conservative Government announced Superfunds is deals with superfunds. What we have got by way of superfund so far is the “bridge to buy-out” model pioneered by Clara. Whether this is considered a clean break with insurance is doubtful.

So far the only financial transaction that has happened to ensure the future of DB pensions in “run-on” has been the Aberdeen/Stagecoach Pension Scheme transfer.

Companies are also looking closely at a deal made by Stagecoach with Aberdeen last year where the asset manager took over as the “sponsoring employer” of the bus company’s scheme, with the aim of growing the surplus and sharing it with members of the pension scheme.

That is not to say that large companies are not renewing their conviction to run on pension schemes that many thought were in the past. With the new conviction that pensions can be a source of capital for sponsors is an increasing feeling that pensions can be deferred pay for staff and not just those in DB. There are many companies, larger and smaller, looking at the failure of the private pension sector to deliver pensions this century.

For them the DB era where pensions are guaranteed is not returnable to for future accrual. But CDC represents a type of pension at a fixed cost to employers that many are looking at as a replacement to the pensions they gave up when DB schemes closed.

I am pleased that FTs insurance and pension reporters are writing an article together that questions what a couple of years back was taken as fact; annuities are no longer being seen as the gold-plated solution for sponsors and members of private sector DB plans.

This blog has been saying for some time that when Britain decides to grow its economy again, the revival of pensions will be very evident.